AmazonScience/document-haystack

1The impact of 2climate change 3on our audit4We have considered the potential impacts of climate change on the financial statements as part of our planning 5of the audit. The Group has set out its commitment to be carbon net zero by 2035 including a reduction in scope 61, 2 and 3 emissions by 2027. The Group’s business model does not include high polluting activities and further 7information about the Group’s identified climate risks is provided in the “Task Force for Climate-related Financial 8Disclosures Statement”. 9As part of our risk assessment, KPMG have inquired with the Group’s head of ESG to understand the climate 10change risks to the Group, the impact of their net zero commitment and what they have assessed the impact of 11these are on the financial statements. We have also read meeting minutes of the Group’s ESG committee and 12applied our knowledge of the Group and sector in which it operates to understand the extent of the potential 13impact of climate change risks on the Group’s financial statements. Considering the nature of the Group’s assets 14and liabilities and taking account the headroom on goodwill and indefinite life intangibles impairment testing, 15there was no significant impact on our key audit matters or other key areas of our audit. 16We have read the Group’s Task Force for Climate-Related Financial Disclosures in the front half of the annual 17report and considered consistency with the financial statements and our audit knowledge. 183. Going concern, viability and principal risks and uncertainties19The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Parent 20Company or to cease their operations, and as they have concluded that the Group’s and the Parent Company’s financial position means 21that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their 22ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).23Going concern We used our knowledge of the Group, its industry, and the general 24economic environment to identify the inherent risks to its business model 25and analysed how those risks might affect the Group’s and Company’s 26financial resources or ability to continue operations over the going concern 27period. The risks that we considered most likely to adversely affect the 28Group’s and Company’s available financial resources and/or metrics 29relevant to debt covenants over this period were: 30 The impact of a significant change in the Group’s gaming tax profile, 31including changes in key geographies;32 The impact of significant changes in the regulatory environment 33affecting the Group’s ability to operate in certain territories; and34 The impact of a cyber security failing affecting the Group’s operating 35systems for a significant portion of the going concern period. 36We also considered less predictable but realistic second order impacts, 37such as the impact of the political changes, which could result in a rapid 38reduction of available financial resources.39We considered whether these risks could plausibly affect the liquidity or 40covenant compliance in the going concern period by comparing severe, but 41plausible downside scenarios that could arise from these risks individually 42and collectively against the level of available financial resources and 43covenants indicated by the Group’s financial forecasts.44We assessed the completeness and accuracy of the going concern disclosure. 45Accordingly, based on those procedures, we found the directors’ use of the 46going concern basis of accounting without any material uncertainty for 47the Group and Parent Company to be acceptable. However, as we cannot 48predict all future events or conditions and as subsequent events may result 49in outcomes that are inconsistent with judgements that were reasonable 50at the time they were made, the above conclusions are not a guarantee 51that the Group or the Parent Company will continue in operation.52Our conclusions53 We consider that the directors’ 54use of the going concern basis 55of accounting in the preparation 56of the financial statements 57is appropriate;58 We have not identified, and 59concur with the directors’ 60assessment that there is not, 61a material uncertainty related 62to events or conditions that, 63individually or collectively, may 64cast significant doubt on the 65Group’s or Parent Company’s 66ability to continue as a going 67concern for the going concern 68period; and69 We have nothing material 70to add or draw attention to 71in relation to the directors’ 72statement in note 2 to 73the consolidated financial 74statements on the use of 75the going concern basis of 76accounting with no material 77uncertainties that may cast 78significant doubt over the Group 79and Parent Company’s use of 80that basis for the going concern 81period, and we found the going 82concern disclosure in note 2 to 83be acceptable.841 Overview 8 Strategic report 88 Governance 140 Financial statements85Entain plc Annual Report 202314686Independent 87Auditor’s Report